Question

Which of the following will cause the demand curve for good A to shift to the left?

a) An increase in income, and good A is an inferior good.

b) An increase in the price of good A.

c) An increase in the price of good B, which is a substitute for good A.

d) An expected increase in the price of good A in the near future,

Answer 1

An increase in income will cause the demand curve for an inferior good to shift to the left, as consumers will opt for higher quality goods, reducing the demand for the inferior good.

Step-by-step explanation:

The question is regarding what causes the demand curve for good A to shift to the left. Among the provided options, an increase in income, and good A is an inferior good will cause the demand curve for good A to shift to the left. This is because for an inferior good, as income increases, the quantity demanded decreases since consumers are likely to shift towards more premium products. Other factors that can affect the demand curve include changes in tastes or preferences, changes in the composition of the population, and changes in the prices of related goods, such as substitutes or complements.